Marriott and Hilton sued over ‘resort fees,’ long a bane for travelers

By Ann Carrns

Published
1:54 pm PDT, Friday, August 23, 2019

The hotel charges known as resort fees are again under scrutiny — this time, from state attorneys general.

Travelers loathe the mandatory — and consumer watchdogs say, confusing — fees, which vary by location, and the services they purport to cover. Some hotels charge the fees for Wi-Fi and gym access, while others may use them to cover in-room safes, newspapers or bottled water — whether guests use them or not.

Attorneys general in Washington, D.C., and Nebraska filed separate but similar lawsuits this summer against two big hotel chains, accusing them of deceiving travelers by failing to include the resort fees in their published room rates, making it hard for consumers to compare rates when booking online. The suits allege that the hotels’ “deceptive and misleading” pricing practices violate consumer protection laws.

The suits, brought against the Marriott and Hilton chains, follow an investigation of hotel industry pricing practices by attorneys general in all 50 states and the District of Columbia, according to attorneys general in Washington, D.C., and Nebraska.

Travelers searching for lodging, whether on hotel websites or separate travel websites, typically are not made aware of resort fees until after they have clicked past the initial search results page and have started booking, according to a complaint filed in July against Marriott International by the attorney general in Washington.

The practice — known as drip pricing, because the full price is revealed piecemeal — makes it difficult for consumers to quickly determine the true cost of a room and compare it with other options, the suit said. “This is a straightforward price deception case,” according to the complaint.

Consumer advocates, who have been fighting the fees for years, applauded the legal action and said they hoped it would help spur industrywide changes.

“What we want is to have all mandatory fees advertised in the room rate,” said Charles Leocha, president and co-founder of Travelers United, a nonprofit group. Resort fees are not only annoying, he said, but also “flat-out deceptive.”

A survey by Consumer Reports conducted last year found that about a third of American adults had been charged a “hidden” hotel fee in the past two years. The hotel industry collected nearly $3 billion in resort and other fees and surcharges in 2018, according to Consumer Reports.

The suits accuse the hotels of using the fees as a way to increase revenue without appearing to raise their room rates. Resort fee notices often are hidden in “obscure” areas, appear in smaller print, or under misleading headings suggesting they are fees imposed by local governments, the suits said.

The lawsuits seek to force the chains to advertise the true prices of their hotel rooms up front, pay money to consumers who were harmed by the fees and pay civil penalties.

At least 79 Hilton properties in the United States charge the fees, the Nebraska complaint said.

“Resort fees are charged at less than 2% of our properties globally, enable additional value for our guests, and are always fully disclosed when booking” on Hilton’s website or mobile app, Nigel Glennie, a Hilton spokesman, said in an emailed statement. He declined to comment on fee disclosures on third-party travel sites. Hilton has about 6,000 properties worldwide under various brands.

A Marriott spokesman said in an email that the company did not comment on litigation, “but we look forward to continuing our discussions with other state AGs.” He did not respond to a question about the status of those talks.

Marriott oversees some 7,000 hotels under more than two dozen brands.

The resort fees — sometimes called amenity or destination fees — vary by hotel. Fees range from $9 to $95 per day at Marriott, and $15 to $45 a night at Hilton hotels, the suits said.

The American Hotel & Lodging Association, an industry group, maintains that resort fees are “not widespread,” according to its website.

But the fees have been an issue for years. In 2012 and 2013, the Federal Trade Commission warned more than two dozen hotels and travel-booking websites that their pricing practices around resort fees may violate consumer protection laws by misrepresenting the true price of hotel rooms.

“While a hotel reservation site may break down the components of the reservation estimate,” the letters said, the “most prominent figure for consumers should be the total inclusive estimate.”

Most of the hotels contacted by the FTC were in tourist areas of Las Vegas, Orlando and Hawaii. But more recently, the fees are being charged at workaday properties, especially in big cities.

“They’re popping up at nonresort hotels,” said Anna Laitin, director of financial policy with Consumer Reports, which this month urged the FTC to investigate and take enforcement action against hotels that did not include mandatory resort fees in their advertised rates.

Hotels that charged such a fee in New York, for example, rose to 85 in 2018 from 15 in 2016, the letter said.

“Hotels should be required to disclose all fees up front so travelers can find the best deal and know exactly how much they’ll pay,” Laitin said.

Mitchell Katz, an FTC spokesman, said the agency would not comment on whether it had investigations under way.

Here are some questions and answers about hotel resort fees:

Q: How can I avoid extra hotel fees when searching online?

A: “You have to be diligent,” Laitin said. Hotel websites and online travel sites may not disclose the resort fee until you have progressed through one or more screens and are close to booking the room. If you’re in a hurry, it can be frustrating to have to back up and start over again with another hotel, she said — but that’s the best way to avoid the fee. If you’re uncertain what the fee covers, call the hotel and ask.

Q: What if I am charged a fee I didn’t expect, when I arrive at the hotel?

A: Ask to see a manager and request to have the fee waived, Laitin said. It may not work, but “it’s absolutely worth a try,” she said.

Similarly, although it’s quicker to agree to an emailed receipt at checkout, it’s better to ask for a printed copy and review it for any surprises before stepping away from the counter, she said. You may neglect to check a digital copy until you return home, she said, and it’s best to dispute unexpected fees while you are at the hotel and can speak directly to a manager.

If you are not successful in person, the website Killresortfees.com suggests paying the fee with your credit card at the hotel, then disputing the charge with your card company. But in at least one complaint filed with the FTC, and cited in the Nebraska lawsuit, a consumer said that approach failed because the fee was listed on the hotel’s final invoice.

Q: Does it help if I’m a member of a hotel’s loyalty program?

A: Sometimes. The Points Guy website, which covers travel topics, says that both Hilton and Hyatt hotels waive resort fees on rooms booked by using points earned in their rewards programs, but Marriott does not.

Travelers who have “elite” status at some loyalty programs may have the fees waived as well, even when paying for the room with currency; check your program’s details.